momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.It brings together, managers from the agricultural world and important people from external perspectives, such as health, development, strategy and defense. Its objective is to promote regulationof agricultural markets by creating new evaluation tools, such as economic models and indicators,and by drawing up proposals for an agricultural and international food policy.

Climate change: an influential factor on the evolution of agricultural markets

September 21, 2015

Climate change is measured in terms of the cataclysmic events throughout the world which have multiplied in recent years. California saw its fourth successive year of drought. In 2014, there were already more than 500 000 hectares of fallow agricultural land in this region which represents $1.5 billion in losses to the agricultural industry and a loss of 17 000 seasonal jobs. According to a study published in early August by a specialized centre at the University of California, in 2015 the state’s severe drought could cost the US government $2.74 billion and $1.84 billion in losses for agriculture alone, as well as 21,000 job losses.

In Central America, El Nino is a worrying phenomenon. For the second consecutive year, the grain harvest was severely affected by drought. According to preliminary FAO estimates, production losses will be 60% for corn and 80% for beans. The countries of this sub-region have thus increased their imports of basic foodstuffs from other regions in Latin America to increase supply and maintain price stability. The Central American Agricultural Council has also declared a state of alert after hundreds of thousands of small farmers lost part or all of their crops.

The vulnerability of agriculture and food security to climate risk is currently one of the major challenges of the twenty-first century. However, climate change alone cannot by any means explain the instability in global agricultural and food. The destructive effects of climate change are amplified by endogenous risks, that is to say the intrinsic and structural failures in agricultural markets: the decrease in global stocks, the non-automatic adjustment of supply and demand on agricultural markets and speculation in agricultural commodities.

Thus, the “climate” factor is a spark that could inflame a situation that is already unstable by nature, because ultimately, how will the fight against climate change prove effective if deregulated markets give in to short-term sirens at the expense of global food security?

In this context of uncertainty, when global warming is one of the major trends that constrains and will continue to constrain more of our farmers, our societies and our economies, it appears crucial to build indicators to measure complex realities in order to strengthen the decision process. One of momagri’s core businesses.